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An analysis of the factors influencing the PP market in East China in the later period

Issuing time:2020-03-24 00:00

1、 Trend review

In August, the price of PP market in East China was stable, while the transaction continued to be flat. Sinopec and CNPC have set off a wave of price increase, which has played a certain role in driving the market. In addition, the overall resources in the field are not abundant. Most traders have a good attitude and follow a small price increase for shipment. However, due to the weak terminal demand, and the downstream factories are afraid of receiving high-quality goods, the overall trading has always been in a poor state.

2、 Future forecast

Upstream market: international crude oil, OPEC will hold a meeting in Algiers, the capital of Algeria, from September 26 to 28. There are many rumors: at this meeting, member countries will reach a freeze production agreement, and Russia will join in the freeze production, so as to prevent the further decline of oil price. However, the other side is still worried, because the oil production of major oil producing countries has quietly soared to a new high. Propylene monomer, some units in China are closed, the supply of monomer in the market is reduced, or provide some support for short-term price.

Market supply: the 2016 G20 summit in Hangzhou, China is just around the corner. In order to ensure the air quality during the meeting, Zhejiang has issued the plan to create the "West Lake Blue" action environmental protection plan, which will divide the pollution enterprises in the area by region and level, and take measures such as stopping production and limiting production respectively. At that time, there will be multiple PP petrochemical units involved. According to the cutting-edge news, Shaoxing Sanyuan and Ningbo Formosa Plastics plan to stop for maintenance at the end of August and the middle of September. The first and second lines of Shanghai Petrochemical Company may be driven in turns. Zhenhai Refining and chemical company is preliminarily determined to reduce the load production, while Yangzi Petrochemical Company, Ningbo Fude Petrochemical Company and Donghua Yangzi Petrochemical Company are waiting to be determined. This policy may provide support for the short-term supply of the market.

Petrochemicals: the pressure on the stock of petrochemical enterprises is not great. The delivery of goods near the end of the month decreases continuously. The supply in the field tends to be tight or continuous. The intention of price fixing will not be changed or it will form a strong support for the spot goods.

Downstream industry: as a sensitive area of environmental protection, plastic industry is naturally concerned at this special moment. It is reported that most of the enterprises shut down during the G20 control period are concentrated in high pollution products enterprises, while plastic products enterprises involve many enterprises, including woven bags, BOPP, daily necessities, wires and cables, and some blow molding enterprises, but most of them do not produce much pollution in the production process, so they are basically ordered to reduce production burden. One commodity company said that they did receive relevant notices, but because of the recent downturn in the plastic industry, their original operating rate is only 70-80%, so reducing the negative to 50-60% will not have too much impact.

On the whole, the downstream factories have been weak in receiving goods. At present, they will face the control of the G20 summit. The persistent weakness of demand will continue to hinder the development of the market. However, under the support of strong quotation of petrochemical enterprises and low social inventory, the possibility of future decline is also small. It is expected that in the near future, the PP market in East China will be stable in the overall market and adjusted in the small market.


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